European stocks close lower as investors reacted to earnings and data

European stocks fell on Friday after the previous session closed at record highs as investors reacted to another flood of corporate earnings and economic data.

 

The Stoxx 600 pan-European index was previously down 0.4%, with most major stock exchanges and sectors in negative territory. Travel and leisure stocks fell 2.5%, resulting in losses, while chemicals were up 1%.

 

Asia Pacific stocks fell again on Friday, approaching their worst month since March 2020, as volatile trading in Chinese tech stocks continued amid regulatory action in China and the fall of Hong Kong's Hang Seng.

 

In the US, stock futures fell on the back of a fall in Amazon stock, but the S&P 500 is still on track for its sixth positive month in a row.

 

Rapid spread of delta Covid-19 and regulations in China continued to weigh on European sentiment, but European stocks continued to rise for the sixth straight month.

 

Profits continued to be at the center of: BNP Paribas, Renault, Air France-KLM and IAG among the big companies reporting on Friday.

 

BNP Paribas reported 26% annual net income growth in the second quarter to 2.9 billion euros ($ 3.44 billion), exceeding market expectations amid recovery in business activity. The French lender's shares fell 1.2%

 

Renault reported a quarterly net profit of € 354 million for the first half, compared with a significant loss of almost € 7.3 billion in the same period last year when the pandemic halted production across the industry. The French automaker predicts full profits in 2021, despite the challenges posed by the global semiconductor shortage. Renault shares fell 3%, however.

 

L'Oréal said Thursday that sales growth accelerated in the second quarter, due in part to a surge in cosmetics sales in the US after restrictions eased. Shares are up 0.3%.

 

At the top, the Stoxx 600 Euronext added 5.3% after its income statement. Italy's UniCredit rose 3.1% after a sharp fall in profits in the second quarter.

 

At the bottom of the index, UK quality assurance firm Intertek is down 8% after first half results.

 

In terms of data, the eurozone economy showed a sharper-than-expected recovery in the second quarter and grew 2% qoq, according to the statistics office of Eurostat.

 

Eurozone inflation rises to 2.2% in July, the highest since October 2018 and above the European Central Bank's target of 2%. However, ECB politicians have indicated that they expect temporary deviations.

 

Germany's annual consumer price inflation jumped to 3.1% in July, the highest level since August 2008, prompting a leading service sector union to call for an immediate and substantial wage increase.